Translated by Andrew Vanburen from a Chinese-language piece in Sinafinance
SOMETIMES WE can't see the forest for the trees.
Our tendency to focus on fast growing counters at times causes us to lose sight of the pillars of the market.
I am talking about the blue chips, the large caps, the supporting columns of the capital market.
Granted, due to their size, they often don't offer the overnight double-digit growth sensations that SMEs might, but given the current whitewater rafting experience that is the Hong Kong stock exchange, I for one am putting my money on the more guaranteed steady returns of the blue chips.
It doesn’t exactly speak well for prospects when Hong Kong’s benchmark Hang Seng Index is down nearly 18% from a year ago.
Many market newcomers might be tempted to chase some of the small caps that have shed a large chunk of their value amid the current selloffs.
However, I for one and much more bullish on the gradual yet steady returns that blue chips are more likely to reward investors with.
To chase the slim salmon is to rush to the crowded riverside gaggle of grizzlies, where the anglers are thick and the quarry is thin.
That's where a narrow-mesh net will suffice and there will be an enviable haul come weigh-in time, at least as far as raw headcount is concerned.
But it behooves the seasoned investor-cum-fisherman to cast the widest net possible in order to weigh the rowboat down as much as possible.
And sometimes it takes an Old Man and the Sea-like determination to haul in the big catch of the day.
While patience is a premium in this case, and success is not measured by quantity, but by quantity, it soon becomes evident that reeling in the whopper and actually netting the beast for further trade to downstream restaurants is more important that bragging to peers about the number of minnows and other throwaways that were entwined in the driftnets.
In short, it's truly time to stop chasing the proverbial "it" stock, with their so-called undervaluations and under-appreciaton.
In turbulent times, one must grab hold of the sturdy dikes, the solid columns and the dry piers to withstand the deluge of doubt and doomsayers.
That's why blue chips are the best cure for the blues these days.
In these topsy-turvy times, there are some demands that never fizzle.
One is vanity, and no one does it better than Magic Holdings (HK: 1633), maker of a leading series of cosmetic medicated masks.
They are not only recession proof, but also a good bet to be part of the next bull run.
See also:
TOP 10 HK Dividend Yields Sport Seven Lenders
BAD APPLES: Hong Kong’s Listing Laggards
HK SHARES: Trash Already Tossed To Curb
In Praise Of China’s Retail Investors
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